1- XYZ Bank would like to conduct some foreign exchange transactions with JKL Bank. JKL
isn’t the most liquid and could have some credit risk. XYZ Bank should suggest which of the
following in order to eliminate risk?
A. Pre-authorized draft
B. Straight-through processing
C. Forward contract
D. Continuous Linked Settlement
2- Due to a loss of proprietary information held for clients, ABC Company has been named
in a billion dollar lawsuit. It was determined that the loss of information was due to a
breach in its computer system firewalls by outside parties. When the lawsuit became
public, the company experienced a steep drop in its stock price. This scenario is an example
of what kind of risk?
A. Internal technology
B. Compliance
C. External theft/fraud
D. Market
3- A supplier can improve invoicing float by:
A. Renegotiating credit terms
B. Establishing a bank lockbox
C. Shortening its order entry process
D. Factoring its receivables
4- A U.S. company decides to enter a new geographic market facing some dominant
competitors, but projects sales growth of 40% in its first year due to its superior product
line. The company decides to only offer electronic payment methods for settlement of its
receivables. A year later, the company’s sales volume only increases by 10%, but their
average days’ sales outstanding of 32 days is the best in the industry. What should the
company have considered in its collection policy objectives?
A. Cost efficiency
B. Customer satisfaction
C. Performance measurement
D. Approved collection practices
5- A bank issues a letter of credit (L/C) and receives a request for payment under the L/C.
The buyer notifies the issuing bank not to make payment because there is a dispute over
the quality of the merchandise. However, the documents received fully comply with the
terms of the L/C. Which of the following statements is true?
[Date] 1
,A. The buyer may immediately return the merchandise and cancel the L/C.
B. The bank may delay payment until reimbursed by the buyer.
C. The bank may delay payment, provided the seller is notified of the dispute within three
business days.
D. The bank must make payment and is entitled to immediate reimbursement from the
buyer.
6- When using the Internet to access auction markets, companies may use certificate
authorities to reduce their exposure to which of the following types of risk?
A. Credit
B. Valuation
C. Counterparty
D. Foreign exchange
7- Over the past 3 years XYZ Company has expanded into multiple countries and
significantly grown its banking relationships. The company now incurs significant expenses
related to payment transaction costs and maintaining multiple bank connections. What
should the company use to combat these rising costs?
A. SWIFT network
B. ACH network
C. CHIPS network
D. Treasury workstation
8- Company XYZ has stable cash flows and sizable assets. The board of directors compared
its WACC with its own industry’s averages and determined that it may be at a competitive
disadvantage. In order to become more competitive, what action will XYZ MOST LIKELY
take?
A. Issue new debt and repurchase common shares.
B. Issue more common shares and retire debt.
C. Reduce the dividend for a few quarters.
D. Issue preferred shares with few quarters.
9- A company is looking for a way to finance their inventory. What is the BEST funding
match?
A. Long-term private placement
B. Short-term debt
C. Equity issuance
D. Stock split
[Date] 2
,Use the information provided in the chart below to answer questions 10-12:
Net Income / Long
term Det=dt &
Equity * 100
1,750,000 /
12,900,000 * 100
=Net cash from
Operation –
Capital
Expenditures =
1,350,000 –
900,000
Days Inventory + Days Receivables
– Days Payables
37 + 14 – 30 = 21
[Date] 3
, • https://www.itexams.com/exam/CTP
• https://certdemy.com/certified-treasury-professional-exam-ctp-exam-free-trial/
[Date] 4
isn’t the most liquid and could have some credit risk. XYZ Bank should suggest which of the
following in order to eliminate risk?
A. Pre-authorized draft
B. Straight-through processing
C. Forward contract
D. Continuous Linked Settlement
2- Due to a loss of proprietary information held for clients, ABC Company has been named
in a billion dollar lawsuit. It was determined that the loss of information was due to a
breach in its computer system firewalls by outside parties. When the lawsuit became
public, the company experienced a steep drop in its stock price. This scenario is an example
of what kind of risk?
A. Internal technology
B. Compliance
C. External theft/fraud
D. Market
3- A supplier can improve invoicing float by:
A. Renegotiating credit terms
B. Establishing a bank lockbox
C. Shortening its order entry process
D. Factoring its receivables
4- A U.S. company decides to enter a new geographic market facing some dominant
competitors, but projects sales growth of 40% in its first year due to its superior product
line. The company decides to only offer electronic payment methods for settlement of its
receivables. A year later, the company’s sales volume only increases by 10%, but their
average days’ sales outstanding of 32 days is the best in the industry. What should the
company have considered in its collection policy objectives?
A. Cost efficiency
B. Customer satisfaction
C. Performance measurement
D. Approved collection practices
5- A bank issues a letter of credit (L/C) and receives a request for payment under the L/C.
The buyer notifies the issuing bank not to make payment because there is a dispute over
the quality of the merchandise. However, the documents received fully comply with the
terms of the L/C. Which of the following statements is true?
[Date] 1
,A. The buyer may immediately return the merchandise and cancel the L/C.
B. The bank may delay payment until reimbursed by the buyer.
C. The bank may delay payment, provided the seller is notified of the dispute within three
business days.
D. The bank must make payment and is entitled to immediate reimbursement from the
buyer.
6- When using the Internet to access auction markets, companies may use certificate
authorities to reduce their exposure to which of the following types of risk?
A. Credit
B. Valuation
C. Counterparty
D. Foreign exchange
7- Over the past 3 years XYZ Company has expanded into multiple countries and
significantly grown its banking relationships. The company now incurs significant expenses
related to payment transaction costs and maintaining multiple bank connections. What
should the company use to combat these rising costs?
A. SWIFT network
B. ACH network
C. CHIPS network
D. Treasury workstation
8- Company XYZ has stable cash flows and sizable assets. The board of directors compared
its WACC with its own industry’s averages and determined that it may be at a competitive
disadvantage. In order to become more competitive, what action will XYZ MOST LIKELY
take?
A. Issue new debt and repurchase common shares.
B. Issue more common shares and retire debt.
C. Reduce the dividend for a few quarters.
D. Issue preferred shares with few quarters.
9- A company is looking for a way to finance their inventory. What is the BEST funding
match?
A. Long-term private placement
B. Short-term debt
C. Equity issuance
D. Stock split
[Date] 2
,Use the information provided in the chart below to answer questions 10-12:
Net Income / Long
term Det=dt &
Equity * 100
1,750,000 /
12,900,000 * 100
=Net cash from
Operation –
Capital
Expenditures =
1,350,000 –
900,000
Days Inventory + Days Receivables
– Days Payables
37 + 14 – 30 = 21
[Date] 3
, • https://www.itexams.com/exam/CTP
• https://certdemy.com/certified-treasury-professional-exam-ctp-exam-free-trial/
[Date] 4
